It is a pleasure to be here with you today to exchange views on the priorities and future directions of the European Neighbourhood Policy. I would like to start by making three remarks about the overall policy framework:

First, the ENP is a strategic policy – very much in the European Union's own interest.

Second, the ENP is a prime example of the European Union's comprehensive approach to foreign policy - using all instruments in a coherent way under the umbrella of the ENP – from Common Foreign and Security Policy, to political cooperation, trade policy, and also sector policies such as transport and energy.

Third, ENP support for reform is based on the differentiation of the "more for more" principles; we tailor our response to each partner's needs and ambition and we offer a stronger relationship with the European Union for those partners that make more progress towards reform.

Let me underline that the European Union can only offer incentives to partners for positive change. These incentives come not only in the form of funding, but also in the form of closer political association, sector cooperation, mobility of people and economic integration with the European Union.

However, the European Union cannot impose reforms on partners. It can only support them. The European Union alone cannot shape events in our neighbourhood. There are many other factors at play. Ultimately, it is our partners themselves who have to make their own choices and exercise their own political will.

Overall, I am confident that our policy framework, as reviewed in 2011, remains sound and appropriate. I am also pleased that funding for the ENP was confirmed at the current levels for the next European Union Multiannual Financial Framework, despite the overall decrease of the European Union budget. This is also an important sign for our partners. It shows that we are serious about this policy, and committed to it in the long-run. The reforms we require take time.

Negotiations for the 2014-2020 European Neighbourhood Instrument regulation are nearing conclusion, and here I want to underline the importance of ensuring sufficient flexibility in the implementation of our financial instrument in the future so that we can react to unpredictable developments in the region. It is also important that both the European Parliament and the Member States finalise negotiations swiftly so that there is no interruption in our financial assistance to partners in 2014.

Let me turn now to the two regional dimensions of the ENP, the East and the South.

The main landmark event in the Eastern neighbourhood this year will be the Eastern Partnership Summit in Vilnius in November. The Summit should highlight the achievements of Eastern Partnership over the last four years and determine the next steps for the period until the Summit in 2015. On that point I would like to thank Poland for its constant support for the implementation of the goals of the Eastern Partnership.

With the Vilnius Summit approaching, we are doing our utmost to ensure that the best set of deliverables is on the table. We have substantively completed negotiations on Association Agreements, including Deep and Comprehensive Free Trade Areas, with Moldova and Georgia and have only small outstanding issues to finalise in the DCFTA negotiations with Armenia. This should provide the basis for initialling agreements at Vilnius. We are engaging regularly and intensely with Ukraine to ensure that there is a clear understanding of issues requiring further progress for signing of an Association Agreement at Vilnius. We continue negotiating an AA (without a DCFTA) with Azerbaijan.

We will also acknowledge the progress in mobility of people and in transport cooperation. However, Vilnius should not only highlight achievements. It should also set out an ambitious agenda for the next two years. Particular areas where we will increase our focus in moving the partnership beyond Vilnius include our stronger engagement with broader civil society, especially with young people and the business community. We will also further develop the process of informal Eastern Partnership dialogues, starting with the next meeting in Yerevan in September where the focus will be on education.

With the Association Agreement/DCFTA negotiations completed and provisional application ahead, the time will be right to raise awareness of the opportunities it will open up. The focus should already be on the preparation of a good list of business projects to be developed together with International Financial Institutions and other stakeholders, especially the European Investment Bank. That will firmly anchor the European Union related agenda as a prime catalyst for reforms.

Once the agreements are signed, the hard work of approximating with the European Union acquis will begin, and our key task for the next years will be to give tangible support to our partners going through this process by:

sharing know-how;

providing financial assistance; and

ensuring that our aid contributes to long-term positive change.

We also promote the inclusiveness of this process and prompt broad public support.

Of course a number of significant challenges remain including:

unsolved regional conflicts; and

the project of Customs Union and Eurasian Union with Russia which is growing in importance.

It is crucial to define a vision for the coexistence and mutual enrichment of the regional projects so as not to end up with two different sets of rules in the European Union economic space and in the Customs Union. I have raised this issue with Russia and a discussion has started on making the regulatory framework for the Customs Union as compatible as possible with the European Union rules.

The most difficult issues to tackle are unsolved regional conflicts and serious human rights concerns in a number of countries, in particular in Belarus.

Here let me recall the values of the European Union - namely liberty, democracy, respect for human rights and fundamental freedoms, and the rule of law. They are at the core of the Eastern Partnership. These are the shared values that we will always defend.

Turning to our Southern neighbourhood, momentous changes have been taking place since the 2011 "Arab spring". The region has been very much in the news and on our minds. How has the European Union been responding to the challenges there?

As Commission President Barroso and High Representative Ashton have pointed out in a letter to European Union Foreign Ministers last month, the European Union has been fully engaged in the transformation process in the region. It has mobilised significant additional resources, offered increased trade and market opportunities and stepped up its engagement with civil society – including through a new ENP Civil Society Facility and a new European Endowment for Democracy. These instruments will be of great benefit in both the Eastern and Southern neighbourhoods. I would like to thank Poland for the leading role it has played in their creation.

The impact and success of our policy largely depends on a common approach by the European Union and by all Member States. However it cannot work without the commitment of partners to reform. Democratic transition is a long and complex process. In some countries, internal political polarisation and deterioration of the economic situation risk weakening social cohesion and hampering progress.

In Egypt, the situation is a matter of great concern. It is of utmost importance that Egypt returns to the democratic process, including the holding of free and fair presidential and parliamentary elections and the approval of a constitution to be drafted in a fully inclusive and democratic manner. All political detainees must be released and the main political forces must be associated in a national reconciliation effort.

In Syria, the conflict continues unabated. One month ago, the Commission and the High Representative adopted a Joint Communication with a comprehensive strategy that:

supports a political process that brings a sustainable solution to the crisis;

prevents regional destabilisation from the spill-over of the conflict in neighbouring countries;

addresses the dramatic humanitarian situation and assists affected populations; and

mobilises additional financial resources from the European Union for an amount of 400 million euro in 2013, bringing the total financial effort of the EU to 1.25 billion euro this year.

It is crucial now that these words are translated into actions to help the Syrian people.

In most other Southern partners, reforms are advancing slowly. However, in Morocco, we have launched DCFTA negotiations and also signed a mobility partnership. There are good prospects that we will start the same process with Tunisia. Tunisia offers good prospects of a successful democratic transition and the EU must remain engaged to support this country.

At the regional level, the Arab-Israeli conflict remains unsolved and also prevents full regional cooperation in the South Mediterranean. We hope that following last Friday's announcement of a return to direct peace talks, we may finally see progress in negotiations between Israel and Palestine.

While no Union for the Mediterranean Summits or Foreign Minister meetings could be held since the 2008/2009 Gaza crisis, we now have four sectorial Ministerial meetings to be held until the end of the year, including on women's role, energy, trade and environment. We are also determined to support closer cooperation and dialogue between the European Union and the Maghreb countries.

I would like to conclude by outlining the priorities and the challenges for the future:

In the South, the priority is a successful transition of our partners to sustainable democracy. This will require time, and the European Union must display both unrelenting support and "strategic patience".

In the East, the priority is a successful Eastern Partnership Summit in Vilnius, which would mark a milestone and a "point of no return" in anchoring our Eastern European partners to the European Union. I hope this will also include an Association Agreement with Ukraine, if Ukraine complies with the benchmarks set by the European Union's Foreign Affairs Council.

On a more general level, the application of the "comprehensive approach" - using all instruments and policies at our disposal in the post Lisbon context, in a coherent way under the umbrella of the ENP - remains a challenge. If the European Union and its Member States consistently use all the tools they have at their disposal – diplomatic, trade, development assistance, and also security tools– then the European Union can be an even more effective actor in our neighbourhood and can have a greater impact addressing the unsolved conflicts.

We cannot ignore what is happening in our closest neighbourhood. Nor can we ignore that the people there look at Europe as a source of inspiration for reforms. That is why it is so important for us to maintain our engagement in the Neighbourhood, focus on implementation and make sure that our offer meets their needs. They deserve no less.